Net Metering in Illinois. Eric P. Schlaf Senior Economic Analyst Illinois Commerce Commission January 31, 2014

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1 Net Metering in Illinois Eric P. Schlaf Senior Economic Analyst Illinois Commerce Commission January 31, 2014

2 Topics What is Net Metering Benefits of Net Metering Net Metering in US Net Metering in Illinois Statistics, Legislation, Rules 2

3 Net Metering Billing mechanism and other rules applicable to retail customers who sell excess electricity to the grid Customers can offset consumption with their own generation Potential inducement to own renewable generation Can be implemented with watt-hour metering Offered primarily to residential customers but can also be offered to commercial and industrial customers 3

4 Benefits of Distributed Generation and Net Metering Consumers. Lower utility bills; increased stability in expenses by replacing some portion of monthly utility bill with payments on the generator system. Can still connect to electric grid; no backup storage is required, decreasing the capital investment. Utilities. Generation located closer to the end users potentially requiring less investment in transmission and distribution infrastructure; onsite generation can remove or defer the need for infrastructure expansion. 4

5 Net Metering in US PURPA (Pub. Law , 1978) allowed customers to sell excess electricity generated by renewable resources to utility Under PURPA sales valued at avoided cost, typically wholesale value of electricity Under net metering, customers generally receive full retail credit (delivery credit plus energy credit) 5

6 Net Metering in US 156,000 net metering customers in US 91% are residential customers California 86,500 Colorado 10,000 Arizona 8,559 New Jersey 7,526 New York 5,638 Illinois 726 Policies vary by State (e.g., compensation, capacity, type of fuel) 6

7 Net Metering in the United States 7

8 Illinois Net Metering Illinois Net Metering Law Public Act and later amendments Section of the Illinois Public Utilities Act (220 ILCS 5/ ) Net Metering Rule (83 IL Administrative Code Part 465) 8

9 Number of Net Metering Customers and Generating Capacity (MW) in Illinois Commonwealth Edison: Solar Wind Both Customers: Generating Capacity: Ameren Illinois: Solar Wind Customers: Generating Capacity:

10 Section (Net Metering Law) Retail customers with renewable generating facilities with a capacity under 2 MW Eligible types of renewable energy facilities include solar, wind, wood, hydro and others Generating facility must be located on customer premises; off-site generation is not eligible for net metering Generating facility should be sized to offset customer s own electrical requirements 10

11 Section (Net Metering Law) All electric suppliers must offer net metering programs Real-time pricing customers are eligible Net metering customers are charged rates that are identical to charges to non-net metering customers; (no connection fees or standby charges) Metering requirements Classifies customers according to whether their electric service is non-competitive or competitive 11

12 Section (Net Metering Law) Limit of 5% of supplier s peak demand Commission required to adopt interconnection and net metering administrative rules Utility net metering programs set by tariff Annual supplier reporting requirements Customers own Renewable Energy Credits 12

13 Non-competitive Net Metering Customers Residential customers and other small-use customers May purchase electricity from utility at non-rtp rate or RTP rate Single, bi-directional meter provided by electric supplier 13

14 Billing for Non-Competitive Net Metering Customers If customer is net purchaser customer pays supplier If a customer is net seller, customer receives 1:1 kwh credit If a customer is on RTP rate, kwh sales or purchases are valued at market price A customer receives delivery credits in hours/periods when it is a net seller Customer is subject to customer charge Credits expire at end of the year 14

15 Competitive Net Metering Customers Generally commercial and industrial customers ComEd: Customers with peak demand over 100 kw Ameren: Customers with peak demand over 150 kw May only purchase electricity from utility at RTP rate Dual channel meter; customer may have to pay for meter 15

16 Billing for Competitive Net Metering Customers If purchasing from the utility, competitive customers are generally, if not always, on RTP Customer is responsible for all taxes, fees, and utility delivery charges that would otherwise be applicable to the gross amount of kilowatt-hours supplied to the customer kwh sales and purchases are valued at market price 16

17 Net Metering Rule - Part 465 Definitions Application of Part 465 Purpose Tariffs Enrollment Procedures Reporting Billing Complaint Procedures Penalty Provisions Miscellaneous 17

18 Data and Information Sources US Net Metering: Energy Information Administration Illinois Net Metering: 2013 Electric Utility Net Metering Annual Reports 18

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